Electrum as a savings account

[frankie_goes_to_valhalla]

Hello all,

I would like to know if it is safe to use Electrum as a savings account? Is there a risk of having their bitcoins stolen?

For example, if I deposit several thousand euros on my wallet, let them sleep for several weeks or months, taking advantage of the fluctuation of bitcoin (hoping that it is up! If it is down it's also the game!), then let's admit that if luck was on my side, I want to withdraw these bitcoins to sell them on an exchange ...

What is your opinion on this practice?

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[OmegaStarScream]

Why not simply buy a hardware wallet instead? You'll sleep better at night.

You can get a Trezor with a 25% discount if you follow these instructions: https://twitter.com/Trezor/status/1326936003593039874

Or, you can wait a couple of weeks for Black Friday hoping they offer a better deal.

[NeuroticFish]

I also advise hardware wallet. And you can easily use it with Electrum (with signature verified).
Without hardware wallet the first malware / attack will probably steal your funds and if you plan of working with thousand(s) of euros, an investment of 60 EUR or even less (especially with Black Friday/holidays offers or coupons) is not too big.

[frankie_goes_to_valhalla]

I just took some information on the internet about hardware wallets and indeed it seems the most appropriate solution! Thanks guys! 

On the other hand, in your opinion is it a common practice to keep several thousand euros in bitcoins on a hardware wallet and to sell them when the situation is right?

When I see what a "livret A" report in France (0.25% per year I believe?), I tell myself that my savings would perhaps be better placed in bitcoin ...

[Rath_]

Trezor and Ledger are most popular option, but i would recommend Trezor since Ledger recently tarnish their own reputation (mainly due to database hack & late response managing bug/vulnerability).

Before recommending Trezor, you should always mention the unfixable seed extraction exploit. While it might not bother some people since it's purely a physical attack, everyone should be well informed of that which Trezor clearly doesn't do. The attack can be mitigated by using a passphrase (the seed and PIN still can be extracted) or SD card protection which is available only on the Trezor T.

[Lucius]

frankie_goes_to_valhalla, Electrum can be quite a secure crypto wallet if you take all precautions and if you are a person who is able to protect your computer/smartphone from Internet threats.

To start, you need a computer that is virus/malware free, then to visit the official Electrum page and download the installation file, which you then have to verify to be 100% sure that you do not have a fake file. You can then install the wallet, back up your seed words, transfer the BTC to your crypto address and choose the option to leave the wallet on your computer or delete it completely.

All you really need is a seed (12 words) with which you can make a wallet recovery at any time. Your BTC is always on the blockchain, and what you have in your possession is information (private key/s) that allows you to control that BTC.

How to Safely Download and Verify Electrum [Guide]

[bob123]

You definitely don't want to store thousands worth of BTC on your internet-connected computer. Especially not if you are using windows.

Definitely look into hardware wallets, and choose the most reputable ones. Either a ledger or trezor.

Both have their pros and cons.
Ledger got a database leak and customer received phishing mails but their hardware wallet doesn't have any known architectural vulnerabilities. Trezors architecture is flawed allowing hardware attacks (which can be mitigated if done correctly) but didn't had any database breach.

[frankie_goes_to_valhalla]

I understand that Electrum can be quite secure, this is also what I have read on other forums. As you say Lucius, you have to know how to secure your computer, like your phone ... I think mine are healthy but not being an expert in computer protection (and some procedures, it's Chinese for me!), I think it is better for me to move towards a hardware wallet to sleep a few thousand euros ...

However, I intend to keep Electrum which will serve as my wallet to make transactions.

[Coin_trader]

I understand that Electrum can be quite secure, this is also what I have read on other forums. As you say Lucius, you have to know how to secure your computer, like your phone ... I think mine are healthy but not being an expert in computer protection (and some procedures, it's Chinese for me!), I think it is better for me to move towards a hardware wallet to sleep a few thousand euros ...

However, I intend to keep Electrum which will serve as my wallet to make transactions.

It's risky to use electrum especially on windows because you didn't if there's a malware in your computer. Some of the malware can't be detected by the anti-virus that's why few people use windows electrum wallet as there main account for savings. For me it's safer to use mobile app of electrum because you can guarantee that your credentials is safe unless you install shady that might exploit your credentials.

But hardware wallet is the best option for you since you are newbie. Custodial might be a good option for you since it's easy to setup security rather than non-custodial wallet like electrum considering that you don't have enough knowledge on crypto. Just make sure to use a safe exchange like binance and coinbase.

[frankie_goes_to_valhalla]

Thank you for this additional information Coin_trader !

As for the exchange, I already have an account on Coinbase, I'm glad you referred to it as a fairly secure exchange 

Besides, how is it going in terms of fees? Let's say I want to buy bitcoins for € 5,000... What will the fees be? (I proceed by bank transfer).
Then I transfer this amount to my hardware wallet, and from time to time, if I am lucky that the btc rate goes up, I think of withdrawing the gains (always leave the same base on my wallet, around € 5,000), transfer these (potential!)  btc gains to Coinbase to sell them and cash the € into my bank account ... I will find my way around the fees?

[Lucius]

As you say Lucius, you have to know how to secure your computer, like your phone ... I think mine are healthy but not being an expert in computer protection (and some procedures, it's Chinese for me!), I think it is better for me to move towards a hardware wallet to sleep a few thousand euros ...

In that case, it is better to choose a hardware wallet - I think you will be able to get it very cheaply since Black Friday is approaching. Of course, there is an option to use Electrum as a user interface with a hardware wallet, which proved to be a winning combination for many.

Besides, how is it going in terms of fees? Let's say I want to buy bitcoins for € 5,000... What will the fees be? (I proceed by bank transfer).
Then I transfer this amount to my hardware wallet, and from time to time, if I am lucky that the btc rate goes up, I think of withdrawing the gains (always leave the same base on my wallet, around € 5,000), transfer these (potential!)  btc gains to Coinbase to sell them and cash the € into my bank account ... I will find my way around the fees?

I think for Coinbase fees its best to read their FAQ so we don’t go to OT. And as for the fees you will have to pay when you send BTC from your hardware wallet, they always depend on how fast you want to confirm your transaction, how many currently unconfirmed transactions is in mempool, and how many input/output addresses you have (size of your transaction), and whether you use a Legacy or SegWit address.

It may sound a little complicated, but when you make a few transactions I'm sure you'll understand how the whole thing works

[frankie_goes_to_valhalla]

Thanks Lucius

Yes, regarding the fees relating to Coinbase, I need to review their FAQ, at least that will be clear.

Regarding the transcation costs, I was aware of the mining costs. On the other hand, I will have to learn about the concept of the number of input and output addresses that I can have, but also on the concept of Legacy or Segwit address (Segwit seems to be often recommended for beginners?) , 2 concepts that I do not yet master. I'm going to look at this on different forums, even if very slowly through our exchanges here I see it more and more clearly (the problem that I have with my Electrum wallet is a plus in my learning  )

[BitMaxz]

It's risky to use electrum especially on windows because you didn't if there's a malware in your computer. Some of the malware can't be detected by the anti-virus that's why few people use windows electrum wallet as there main account for savings. For me it's safer to use mobile app of electrum because you can guarantee that your credentials is safe unless you install shady that might exploit your credentials.
~snip~

Electrum app on mobile is fine but if it's connected to the internet your funds still at risk. We all know that nothing is impossible for hackers so if you want to keep your wallet safe you should never connect it to the internet. This is one of the reasons why they make a hardware wallet to protect your funds from any attacks online.

~snip~

However, I intend to keep Electrum which will serve as my wallet to make transactions.

If you still want to use Electrum without hardware wallets you can still use it as a cold storage/offline wallet and I suggest you learn how to make an offline/raw unsign transaction and sign them with your Electrum cold storage.
Use this tool to make unsign transaction https://coinb.in/#newTransaction

Follow the guide from the link below but don't follow the whole guide stop on step 5 after you copy the unsigned raw hash and transfer them to your offline device and import it to your Electrum cold storage to make a signed transaction.
- https://bitcointalk.org/index.php?topic=1963263.msg19590145#msg19590145

After signing transfer the signed transaction hash again to online device and broadcast them to any broadcasting site like https://blockchair.com/broadcast or go back to coinb.in and use this https://coinb.in/#broadcast

[frankie_goes_to_valhalla]

~snip~

However, I intend to keep Electrum which will serve as my wallet to make transactions.

If you still want to use Electrum without hardware wallets you can still use it as a cold storage/offline wallet and I suggest you learn how to make an offline/raw unsign transaction and sign them with your Electrum cold storage.
Use this tool to make unsign transaction https://coinb.in/#newTransaction

Follow the guide from the link below but don't follow the whole guide stop on step 5 after you copy the unsigned raw hash and transfer them to your offline device and import it to your Electrum cold storage to make a signed transaction.
- https://bitcointalk.org/index.php?topic=1963263.msg19590145#msg19590145

After signing transfer the signed transaction hash again to online device and broadcast them to any broadcasting site like https://blockchair.com/broadcast or go back to coinb.in and use this https://coinb.in/#broadcast

Thanks for your help BitMaxz but I did not understand the procedure you want to teach me through this message?

So I looked, I tried to follow the tutorial, but besides the fact of not understanding the purpose of the procedure, I did not understand which addresses to enter in the boxes ... The amount that I must put , fees ... No, really, I'm sorry, I didn't understand anything about this procedure ...

[Husna QA]

It's risky to use electrum especially on windows because you didn't if there's a malware in your computer. -snip-

Maybe Linux (like Tails) can use as an alternative to running Electrum.

-snip- But hardware wallet is the best option for you since you are newbie. Custodial might be a good option for you since it's easy to setup security rather than non-custodial wallet like electrum considering that you don't have enough knowledge on crypto. Just make sure to use a safe exchange like binance and coinbase.

I do not recommend storing assets in a custodial wallet such as an exchange, mainly if its use as the primary account for savings. You should also explain the risks that may occur when saving on an exchange, in addition to the benefits it offers.

[BitMaxz]

Thanks for your help BitMaxz but I did not understand the procedure you want to teach me through this message?

So I looked, I tried to follow the tutorial, but besides the fact of not understanding the purpose of the procedure, I did not understand which addresses to enter in the boxes ... The amount that I must put , fees ... No, really, I'm sorry, I didn't understand anything about this procedure ...

The address should be the Bitcoin address that you created from Electrum that contains the Bitcoin balance. If you are confused by the guide above check these two guide below.
This is a bit techie and everything is manual it's not the same as what we normally do when sending Bitcoins. Only do the step until you generated unsigned raw transaction and copy.

- How to create, sign and broadcast transactions using coinb.in
- Create a New Transaction with Coinb.in

If you still confused you can try this below.

- Securely send a Bitcoin Paper Wallet: Offline Signing with your air-gapped Phone via Electrum

[Lucius]

BitMaxz, I think it's a bit too much information for a beginner, for a start he should master some basics - and if he buys a hardware wallet he should pay attention to only 2 things - to never put his seed anywhere else except in his hardware wallet, and to check and confirm all transaction details on the user interface and hardware wallet screen to avoid clipboard malware that can change the coin address.

Thanks Lucius
Regarding the transcation costs, I was aware of the mining costs. On the other hand, I will have to learn about the concept of the number of input and output addresses that I can have, but also on the concept of Legacy or Segwit address (Segwit seems to be often recommended for beginners?)

You're welcome

As for the input/output, it is about the number of addresses to which you send BTC (there can be only one or more of them), and the number of addresses from which you send (also there can be one or more of them). Let's say you bought a BTC on Coinbase a few times, each time you used a different deposit address in your crypto wallet, which means that each time your coins went to a different BTC address.

If you ever want to spend your BTC (send to exchange), and the total amount would be higher than what you have at one address, then the wallet will automatically add the amount from another address, which will mean that you have 2 inputs and 2 outputs at a minimum (1 deposit address and 1 change address). Change address is something which protects your privacy, and it is about returning the unspent balance to the brand-new address instead of the address from which you are sending, which is of course part of your crypto wallet.

[frankie_goes_to_valhalla]

thank you all for your good advices, I can see it more clearly, even if I did not succeed in the manipulations proposed by BitMaxz, I will continue to learn (but thank you anyway  )

[bob123]

Besides, how is it going in terms of fees? Let's say I want to buy bitcoins for € 5,000... What will the fees be? (I proceed by bank transfer).

This really depends on the exchange you are using.
You can check their site listing all the fees including trading, deposit and withdrawal fees. These differ from exchange to exchange.

The transaction fee itself when sending BTC is relatively small compared to the exchange fees.